Bumpy ride as Tokyo takes in banks 'plea'

JAPANESE stock markets were mesmerised today by conflicting reports of calls for a rapid bail-out of the debt-ridden banking sector by Bank of Japan Governor Masaru Hayami.

Stories that Hayami had last night urged Prime Minister Junichiro Koizumi to unleash a rescue mission, were played down, but not totally denied, by other government ministers today.

Bank shares firmed on the reports, partially countering losses in technology counters, and in bumpy trading Nikkei 225 Average fell 13.03 points to 9834.13. Other Asian markets tumbled after heavy overnight falls on Wall Street and Nasdaq, which both succumbed to the Enron effect and concerns over corporate accounting.

Financial circles in Tokyo were digesting reports that Hayami had called on the Prime Minister last night to urge him to approve a massive injection of taxpayers' money into the banking sector. This lifted shares of leading lenders, led by Mizuho Holdings, which added almost 3%.

The Bank of Japan confirmed that a meeting had taken place, but would not comment further.

The Nasdaq-inspired fall in technology stocks in Tokyo was accelerated by warnings that mobile phones giant Matsushita Electric will raise forecasts for full-year loses when it reports third-quarter figures tomorrow. Shares in the company, which as already cut back production in Britain, fell 2.5%. Doubts about the reliability of the accounting systems of US corporations continued to foster uneasiness in other Asian markets, prompting a round of profit-taking.

Taiwan led the regional slide as its technology sector suffered from continued profit-taking, while South Korea and Hong Kong also retreated sharply.

Taiwan's tumble did not reflect hard news on its technology sector, which is expected to do well from bounding chip prices. This failed to deter sellers, and the Weighted Average index slid 169.48 points to 5692.18. The country's big two chipmakers, Taiwan Semiconductor and United Microelectronics, both lost as much as 4%.

Wall Street's overnight fall of 1.6% triggered selling in Hong Kong, and the Hang Seng index lost 102.61 points to 10,737.88. Further worries that HSBC Holdings could be hit by hollowed-out balance sheets and smoke and mirrors accounting in the US saw the stock down more than 1%.

South Korean shares were hurt by Nasdaq's heavy falls, and the Kospi dropped 6.64 points to 775.63, led down by weaker electronics counters.

The exception was Hynix Semiconductor, which rose almost 3% on suggestions that it is now about to enter into joint venture talks with rival Samsung Electronics-Sydney stocks tracked Wall Street, led by a weak News Corporation, and the All Ordinaries index fell 31.5 points to 3382.6. Some excitement was generated among smaller quoted wine producers on signs of a growing urge to merge in the sector.

South East Asian markets followed the regional pattern, with the exception of Thailand's SET index which rose 1.36 points to 371.55.

Singapore's Straits Times index lost 19.82 points to 1722.91, Malaysia's Kuala Lumpur Composite index drooped 6.56 to 723.17, and in Indonesia the Jakarta Composite index eased 2.51 points to 458.18.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.